Pressured by a $16 billion budget deficit, the governor is proposing a major overhaul of the state’s welfare-to-work program with the strategy of slashing people’s benefits to motivate them to get jobs faster.

The move, if approved by the state Legislature as part of the 2012-13 budget package, would save $880 million, but beyond the savings, analysts say it represents a shift in the philosophy of how the Golden State helps its neediest residents.

“It’s a reversal of the state’s historic commitment to these families and children,” said Scott Graves, senior policy analyst with the California Budget Project. “It’s a very significant change.”

California is the national leader in welfare recipients. About 3.8 percent of state residents were on welfare in 2010, the highest percentage in the country. In fact, California houses about a third of the nation’s welfare recipients, while only housing one-eighth of the national population.

Most of the recipients, however, are children – more than three-quarters of the 1.5 million in the welfare-to-work program CalWORKs, which stands for California Work Opportunity and Responsibility to Kids. The rest are mostly single mothers who must work or participate in job training and related activities to receive cash assistance.

The state has traditionally held a relatively generous attitude toward welfare. For instance, CalWORKs gives cash grants to children even when their parents are ineligible for benefits for various reasons, such as being illegal immigrants, receiving disability, or failing to abide by the program’s rules. Only three other states – Indiana, Oregon and Arizona – have such an expansive policy.

California also allows parents to receive job services and cash grants for up to four years. Before last year, the limit was 60 months.

The policies have made the program an expensive budget line – the state spends $2.9 billion on CalWORKs and related programs – and an easy target for lawmakers looking for costs to trim with little political fallout. In years past, lawmakers have proposed doing away with benefits to children with ineligible parents and even slashing the whole CalWORKs program.

The state’s budget woes have given renewed impetus to whittle away at CalWORKs. Last year, the maximum five-year benefit period shrunk to four years and monthly grants were diminished 8 percent. A family of three currently receives $638 a month, less than the rate in 1988.

For the next fiscal year, the governor is proposing more sweeping cutbacks, including a 27 percent cut in cash assistance to children with ineligible parents and further slashing the time limit for full benefits from four years to two years.

Other rule changes would restrict benefits to mothers of younger children and families earning poverty-level wages and increase sanctions on those who violate program terms.

“We felt the program was losing its focus of welfare-to-work,” said Todd Bland, deputy director the state Department of Social Services’ welfare-to-work division. “The reason we wanted to refocus is because of the very difficult budget environment.”

The changes also come at a time when California is appealing federal penalties of $160 million because it failed to move enough welfare recipients to private sector jobs of at least 30 hours a week in 2008 and 2009, a requirement to receive federal money that helps pay for CalWORKs. Many California recipients are given part-time, publicly subsidized jobs so they get work experience.

CalWORKs recipients say getting a regular job that pays enough to support a family is not easy as lawmakers think.

Sarah Smith, a 31-year-old divorced mother of four in Los Angeles County, had been a stay-at-home mother since the age of 18, only working sporadically between having children. She was forced to turn to CalWORKs a year ago after her husband stopped paying child support. She received $850 a month in cash aid and $700 in food stamps.

She’s also been able to make herself more marketable through the job services the program offers. She’s beefed up her clerical skills, self-confidence and resume with a minimum-wage, temporary job as a customer service assistant with the county Department of Social Services, but the job ends this month.

She’s hoping she now will be able to find a permanent job. If not, she will try for a subsidized job program where the county pays half her salary and the private employer pays the rest.

Policymakers don’t realize that people need a chance to rebuild their lives, Smith said, adding that CalWORKs aid is far from enough to live on.

“It’s still a juggling act,” she said. “People are trying to get jobs. No one really wants to be on welfare. Most people are trying to get off it.”

Nearly half of CalWORKs families move off the program within two years, but about 18 percent are long-term. Those families are often have very young children and headed by parents who lack a high school diploma or job skills, or have a family member with a disability, according to a report by the Public Policy Institute of California.

Brown’s reforms aim to get parents off welfare before they become entrenched. The plan calls for parents to be hired or employable within two years of entering the program by providing job training and counseling, mental health, substance abuse and domestic violence support services, and child care. They must either work or participate in those activities to get the cash aid.

After two years, the services and some money would be cut off if they do not find a private sector job – a move that would affect about 130,000 parents, according to the state Legislative Analyst’s Office.

Those parents could still receive a much-reduced cash benefit for child maintenance. A parent with two children would receive $375 a month, a drop of $263.

If parents do find employment, they could still be eligible to receive services such as child care for another two years and some cash aid if their income remains below a certain level.

Social service providers say it’s overly optimistic to expect the private sector to absorb tens of thousands of people, many with minimal job skills, with California’s unemployment rate the second highest in the nation at 10.9 percent in April. Only 11 percent of CalWORKs parents had private sector jobs of at least 30 hours week in 2009, according to the Public Policy Institute of California.

“CalWORKs recipients are living on a shoestring as it is,” said Frank Mecca, executive director of the County Welfare Directors Association of California. “This is going to plunge many children into poverty and likely increase homelessness. You’re shredding the safety net at a time when it’s needed most.”

Republicans say it’s about time California pushed harder to get people to self-sufficiency, and say more is needed. Halving the time limit is a good move, but continuing to give parents cash for children with no strings attached defeats the purpose of welfare-to-work.

“It removes the responsibility from the parent. You’re taking away the accountability from the oversight of the program,” said Assemblyman Brian Jones, R-Santee, vice chairman of the Assembly Human Services Committee.

Instead of focusing on half measures of welfare reform, the governor should concentrate on job-stimulation strategies so people have a place to go, he said. “If there’s no regulatory reform, he’s wasting his time,” Jones said.

The debate over CalWORKs’ mission is likely to continue, especially if state revenues continue to fall short, said Caroline Danielson, policy fellow at the Public Policy Institute of California.

“The interest is in reorienting the program toward work,” she said.

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